Brand Firm Performance and Tough Economic Times

Abstract

Negative income shocks may cause lower consumption and a switch in consumption from brand to non-brand products as consumers economize on price (Larkin 2013). This switch can also be the result of the vigorous promotion of private label products (Lamey et al. 2012). However, dedicated customers and conspicuous consumption (Veblen 1899; Berger and Ward 2010) can mitigate or even neutralize these effects on brand firms. Consistent with the notion that enduring consumption by brand customers has a stronger effect, we find that compared with non-brand firms, brand firms performed better in and recovered quicker from the difficult economic times of the late 2000s.